The UK ETS Authority has announced its intention to include the maritime sector from 2026 and recognise non-pipeline transport methods, such as shipping, road or rail, for moving captured carbon into geological storage.

By expanding the scheme to include the maritime sector, businesses with ships operating domestic voyages would need to obtain allowances for every tonne of carbon they emit. This will ensure that the price of fuels used by the sector better reflects their environmental impacts.

Now the UK ETS will also ensure that operators transporting CO2 for storage can deduct the amount they send to storage from their reportable emissions, providing economic support for industrial sites without access to pipelines.

The UK ETS Authority has additionally confirmed that it will make changes to free allocation rules to ensure participants who permanently cease their operations cannot benefit from surplus free allowances in their final year. This will ensure their free allocation in their final year is proportionate to their activity levels.

Launched in 2021, the UK ETS was designed to aid decarbonisation across aviation, power and industry by setting a limit on emissions, with allowances that can be traded, creating a carbon price that incentivises businesses to reduce their emissions.

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